Traders Market Weekly: Two Tribes Go to War

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    Helmholtz Watson

    Putin’s aggression much an attack on the U.S. global order as on Ukraine. He has been excoriating U.S policy for a while growing tired of Russian hate and is adamant the U.S. has repeatedly trampled over his red lines with “colored revolutions,”

    Putin has no doubt been conceptualizing his counteroffensive for years. Perhaps he waited for President Trump to leave the White House. Or he needed to ensure his military and technology were up to the challenge.

    Add in cementing his relationship with chairman Xi and China. Is it possible he’s been waiting patiently for years for this moment? Especially at this critical juncture, his calculation might be that the West has so much more to lose than Russia with Germany and it’s energy reliance


    Live shot of Ukraine Separatists in #Donbass commanders to troops (sorry concerned civilians)


    The French government will inject EUR2.1 bln into utility provider EDF on Friday.

    France’s January CPI was up 0.3% m/m, as expected (last 0.2%) and up 2.9% yr/yr, as expected (last 2.8%). Q4 Unemployment Rate fell to 7.4% from 8.0% (expected 7.8%).

    • This reply was modified 2 years, 2 months ago by Truman.

    Friday Existing home sales increased 6.7% m/m in January to a seasonally adjusted annual rate of 6.50 million (consensus 6.08 million). Total sales in January were down 2.3% from a year ago.

    The key takeaway from the report is the push to buy existing homes in January as mortgage rates increased — and were expected to increase further. That left unsold inventory at a record low, which is going to keep price pressures elevated and prospective buyers, particularly first-time buyers, facing an affordability pinch in the face of such lean supply for lower-priced homes and higher mortgage rates.

    Helmholtz Watson

    There is theory that Ukraine is not unhappy with Putin’s move as now #Russia is saddled indefinitely with responsibility for Donetsk and Luhansk are ravaged by 8 years of war and in need of massive economic support

    Moscow also now faces sanctions and international condemnation for abandoning the Minsk process after long maintaining that it was committed to it.


    Market Updates

    S&P Futures vs Fair Value: -4.0
    10 yr Note: 1.916%
    USD/JPY: 114.87 +0.14
    EUR/USD: 1.1337 +0.0025
    Europe: FTSE: -0.1% DAX: -0.7% CAC: -0.4%
    Asia: Hang Seng: -2.7% Shanghai: -1.0% Nikkei: -1.7%
    Gold (1896.70 -3.10) Silver (24.09 +0.10) Crude (95.07 +4.00)


    The global equity markets are mostly lower but significantly off the worst levels of the night. The sour sentiment stemmed from increased tensions between Russia and Ukraine. Over the weekend, Russian President Putin declared two territories in eastern Ukraine as independent and ordered deployment of troops into those regions. Despite this, S&P Futures are in minor negative territory, and even pushed through the neutral zone in recent minutes. Spoos are trading about three points lower to around the 4340 area. The high was set during the holiday trade at 4391.25 while the low resides at 4250.00.

    In Asia, China fell 1% while Japan tumbled 1.7%. The Shanghai was stymied by chatter that Beijing is mulling new regulatory plans within the tech sector. In Japan, the Nikkei dropped for a fourth consecutive day. Semiconductors suffered severe selling with Advantest and Tokyo Electron shedding 4-5%.

    In Europe, the major bourses are mildly weaker. These markets are echoing the tone witnessed across the globe. Financials are among the leaders to the downside with lenders such as HSBC, Societe Generale, Credit Agricole, Commerzbank and Deutsche Bank all down around 2-3%.


    DOW off only about -150 after future were down over -500
    OIL spiked to $96 & fell back to $93 (Ukraine crisis + Marathon refinery fire in Louisiana)
    And “PEOPLES CONVOY” will be heading to District of Crime on March 3rd to protest VAX mandate


    The CME FedWatch Tool at 28.8% probability of a 50-bps hike, down from 58.9% last week. At one point, it was 98.6%.


    HAPPY 2-22-22 … while I don’t believe in astrology — This “TWOs DAY” on TUESDAY is indeed a palindrome


    Dow 33,596.41 -482.77 -1.42%
    S&P 500 4,304.72 -44.15 -1.02%
    Nasdaq 13,381.52 -166.55 -1.23%
    GlobalDow 4,098.74 -39.33 -0.95%
    Gold 1,902.80 3.00 0.16%
    Oil 92.27 1.20 1.32%


    Overnight Summary — World markets set the stage for rebound

    The global equity markets are mostly higher. S&P Futures are up about 30 points to trade around the 4330 area. The futures market opened higher and has remained in positive territory throughout. The spoos have witnessed a range that saw a low of 4309.00 and a high of 4345.50.

    In Asia, China popped nearly 1% while Japan was closed for public holiday. The Shanghai took back nearly all of the prior day’s losses with the rise on Wednesday. The Chinese benchmark held firm for the duration of the session and managed to close at the day’s high. Japanese markets were closed in honor the Emperor’s Birthday.

    In Europe, the major bourses are gaining ground. Eurozone inflation cooled off in January. The Core CPI showed a decline of 0.9%, even lower than the forecast of a drop of 0.8%. Investors are shrugging off weaker than expected German Consumer Climate data. Corporate earnings remained relevant in traders’ minds. Names such as Stellantis, Barclays and Danone are trading 3-5% better after releasing their respective fiscal year reports.


    Market Updates

    S&P Futures vs Fair Value: +30.0
    10 yr Note: 1.969%
    USD/JPY: 115.03 -0.04
    EUR/USD: 1.1358 +0.0033
    Europe: FTSE: +0.4% DAX: +0.8% CAC: +1.2%
    Asia: Hang Seng: +0.6% Shanghai: +0.9% Nikkei: CLOSED
    Gold (1895.20 -12.20) Silver (24.07 -0.25) Crude (91.01 -1.34)


    S&P 500 futures 0.9% above fair value; Nasdaq 100 futures 1.2% above fair value; DJIA futures 0.9% above fair value

    Key factors driving the futures market:

    S&P 500 closing in correction territory (down 10%+ from prior high) has triggered buy-the-dip interest
    Belief that market, and many individual stocks, have gotten oversold and are due for a bounce
    Speculation that Russia-Ukraine situation won’t escalate to worst-case scenario
    Secretary of State Blinken cancels meeting with Russian Foreign Minister Lavrov; Ukraine declares state of emergency
    Treasury yields rise on inflation/rate-hike worries
    2-yr note yield +6 bps to 1.61%; 10-yr note yield +2 bps to 1.97%


    Research calls of note:

    Upgrades: AWK, FLR, INTC, OLPX, PANW, SUN, MRO
    Downgrades: CX, DGX, NOV, RXT, TRU

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